Republic of Türkiye
Revenue Administration
İzmir Tax Office
Income Taxes Group Directorate
Date: 25.07.2024
Number: E-84098128-125[32-2022/32]-….
Subject: Whether services provided to foreign-flagged vessels at marinas in Turkey can benefit from a 1% tax reduction according to Article 32 of the Corporate Tax Law by being considered as service exports.
In the special request form and its attachments referenced, it is stated that various services (such as forklift usage, strut replacement, towing, land parking, diving, cradle pool usage, marina backup, pedestal service, crane, repair, emergency water discharge, storage rental, solid waste collection, hull cleaning, boat cleaning, water, electricity, additional staff overtime, equipment damage, parking entrance, adapter, and environmental cleaning services) are provided to foreign-flagged boats at the [Marina Name] Marina. The request is whether the income derived from these services can benefit from a reduced corporate tax rate according to Article 32, paragraph 7 of the Corporate Tax Law.
According to Article 32, paragraph 7 of the Corporate Tax Law No. 5520, institutions engaged in export can apply a 1 percentage point reduction to their income obtained exclusively from export activities starting from January 1, 2022, or from the beginning of the special accounting period that started in the 2022 calendar year for taxpayers subject to a special accounting period. With the amendment made by Law No. 7456, it is stipulated that a 5 percentage point reduction applies to the income obtained in 2023 and subsequent taxation periods, and for institutions with a special accounting period, it applies to the special accounting period starting in the 2023 calendar year and the following taxation periods.
The detailed explanation regarding this issue is given in the “32.1.2.5. Application of a 1 percentage point reduction in corporate tax rate for income from export activities” section of the General Communiqué on Corporate Tax No. 1, which states: “Exporting institutions can apply a 1 percentage point reduction to the corporate tax rate applicable to income obtained from both goods and services exports for the relevant period. For the purposes of this article, service exports cover services provided for and utilized by a foreign customer abroad. Additionally, income from roaming services provided in Turkey to foreign customers under international roaming agreements, provided that it is reciprocal, will also be considered for the 1 percentage point reduction.”
Based on this provision and explanation, since the services provided to foreign-flagged vessels at Çeşme Marina are performed and utilized within Turkey, it is not possible to apply a reduced corporate tax rate to the income derived from these activities.
Source: Revenue Administration
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